Standing Committee E

[Mr. Derek Conway in the Chair]

Housing Bill

Ordered, 
 That the Order of the Committee of 20th January (as amended by the Order of 3rd February) be amended by, in the Table— 
 (a) leaving out ''11.25 a.m. on Tuesday 10th February'' in the second column and inserting ''6.55 p.m. on Tuesday 10th February''; 
 (b) leaving out the entry beginning ''Clauses 147 to 154'' in the first column, the related entry in the second column, the entry ''Remaining proceedings on the Bill'' in the first column and the related entry in the second column and inserting— {**t cols="2"**} {**bt**} 
Clauses 147 to 154, Clauses 158 to 164, Clause 146, Clauses 155 to 157, Clauses 165 to 169, Schedule 8, new Clauses and new Schedules relating to Part 6, Clauses 170 to 190, Clauses 196 to 199, Schedule 10, Clause 200, Schedule 11, Clauses 201 to 204, new Clauses and new Schedules relating to Part 7 and remaining proceedings on the Bill. 
 6.55 p.m. on Tuesday 24th February''.—[Keith Hill.] 
Clause 127 Duty to have a home information pack 
Mr. John Hayes 
 (South Holland and The Deepings) (Con): I beg to move amendment No. 443, in 
clause 127, page 86, line 20, leave out 
 'the duty of a responsible' 
and insert 
'a matter of voluntary discretion for a'.

Derek Conway: With this it will be convenient to discuss the following amendments: No. 444, in
clause 127, page 86, line 22, at end insert— 
 '( ) The seller, when marketing the property, is obliged to specify whether or not a home information pack is to be provided'. 
No. 445, in 
clause 127, page 86, line 23, leave out subsection (2). 
No. 446, in 
clause 128, page 86, line 32, after 'which', insert ', where available,'. 
The Committee will recall that the principle of the voluntary scheme was debated extensively last Thursday. I hope that that debate will not be repeated today.

John Hayes: It would indeed be inappropriate to extend our deliberations on this group of amendments into last Thursday's debate to any great degree. However, I wish to put the amendments in context. We had a long debate last week on an amendment tabled by the Liberal Democrats that would have changed the
 nature of the home information pack scheme from mandatory to discretionary. The amendments that we are now discussing would do precisely the same thing, but amendments Nos. 444, 445 and 446 deal with the repercussions of such a change. In other words, they explicitly acknowledge that packs may be desirable and that they may have a use, but that there are circumstances in which their use is questionable.
 We talked at length about duplication and houses that are covered by a warranty having to have a pack, too. Under considerable pressure, the Minister conceded on what he described as brand-new homes. He was not minded to do so until he heard the arguments advanced by Conservative Members and, to some degree, by Liberal Democrat Members. He made something of a U-turn on that issue, but he did not clarify the position regarding other types of property that are not new, but are still covered by warranty. 
 Matters such as the first, or even the second, resale of a property that is still covered by warranty remain of concern. Properties in their early life sometimes change hands quickly—perhaps several times in the first year after they are built—and it seems curious that such properties must have a further inspection and a pack when their warranty already provides a large measure of legal protection. I shall not go into the details of the other arguments advanced last week, because that that would not give you any pleasure or satisfaction, Mr. Conway, and I wish to deny you neither of those things. However, the circumstances of several categories of property militate in favour of a scheme that can be applied more flexibly—essentially, a voluntary scheme. 
 Although the Minister is not generally prone to repetition, he will probably repeat the argument that previous efforts at voluntary schemes have not been altogether successful. He was dismissive of the Law Society scheme. I shall not defend it—I leave that to the hon. Member for Ludlow (Matthew Green) whose every move, as we heard last week, is based on the society's advice. However, in the right circumstances, with the right Government support and guidance, it would be possible to inject life into voluntary schemes—perhaps the Law Society's scheme or a variant of it—and, by giving impetus, to make such schemes workable and successful. 
 The amendments are straightforward; they call for discretion and for a voluntary scheme. Amendment No. 444 provides that 
 ''The seller, when marketing the property, is obliged to specify whether . . . a . . . pack is to be provided''. 
Certainty about how a voluntary scheme would operate is important. It is fine to have a scheme built around a partnership between the various agencies involved in selling homes, as long as, from the purchaser's perspective, there is the clarity—the Minister called it ''transparency''—that motivates the Government. That has consequential effects dealt with in amendments Nos. 445 and 446. 
 Without more ado, I should say that we previously have had a long argument about part 5. I know that the Minister will be brief but powerful in his response. I 
 think that there has been a gradual acceptance by the Government that the measure is a bit of a dog's dinner. Perhaps hastily, in the excitement that sometimes comes with being in opposition, Labour went a little too far and made the commitment to have home information packs in its manifestos in 1997 and subsequently. I do not get excited very often, but I know that when he was in opposition, the Minister became excited on occasion. However, the realities of government have obliged him to reconsider to some degree. 
 We have heard about phasing, about packs that contain some of, but not all, the information, and about the difficulties of implementation. There is a grudging and gradual acceptance that there will not be a smooth transition to mandatory packs, and that there might be a hostile reaction. For that reason we offer the Government a chance to get off the hook. They do not need to say that they proposed a voluntary scheme: they can say that the Tories championed it, that the Liberal Democrats made their peculiar contribution—I use ''peculiar'' to mean specific or particular—to the debate, and that finally the Government were persuaded by the power of the arguments. That is the chance we offer the Minister. I hope that he will take it, because I think that that would be welcomed by the industry and by home buyers everywhere. All who have studied the matter realise that a voluntary scheme would be better, so I am pleased and proud to move the amendments.

Matthew Green: Good morning, Mr. Conway. I hope that you had as a good a breakfast as the hon. Member for South Holland and The Deepings (Mr. Hayes) clearly had. He has come here bouncing—perhaps he has been wearing his bow tie.
 The amendments appeared late in the day. The Conservatives realised that they had missed a trick and said, ''We had better table some amendments that reveal that we, too, are in favour of a voluntary rather than a compulsory scheme.'' Better late than never, I suppose—we welcome converts. However, the amendments follow broadly the same thrust as ours. You will be relieved to hear, Mr. Conway, that I will not go over the same ground as on Thursday, although we had an entertaining discussion that afternoon. 
 I will comment specifically on a couple of the amendments, because the hon. Member for South Holland and The Deepings did not go into detail. If the scheme is to be voluntary, there must be absolute clarity about whether a pack is available. That was addressed in an earlier group of amendments, but it is worth commenting on in this discussion. If the scheme is to be made voluntary and is to have some success, one consideration the buyer might take into account is whether the property has a seller's pack. Such a pack might increase the likelihood of somebody making a higher offer, so it might be in the seller's interest to have a pack. We might see the market working, which the Minister appears to be so afraid of. Many sellers would consider it in their interest to produce a pack 
 because it would stick a few thousand on the valuation of the property and of likely bids. That idea is important. 
 Under amendment No. 444, the seller marketing a property is obliged to specify whether a home information pack is to be provided. That would be a step forward. The amendment would help the Minister to accept something that he might eventually have to accept—he may have the big battalions in this Room, but he does not have them everywhere. Others, too, will want to question him about this part of the Bill, and with some validity. 
 I hope that the Minister had a nice, relaxing weekend and had time to think about what he said on Thursday, that he has realised that he was a little over-strong in his defence of the indefensible and that he will concede that a voluntary scheme should be considered. He could gracefully pledge to introduce amendments on Report to achieve that.

Andrew Selous: I rise to ask the Minister to tell the Committee whether, in any of the pilot schemes that he has quoted in support of his wish to make home information packs compulsory, any of the buyers or sellers had to pay for the packs. The House of Commons Library brief on the Bristol pilot tells us that free packs were offered. If the Minister is going to oppose amendments that would make the scheme voluntary, he should tell us whether there is any evidence of support for packs when consumers have to pay for them and may suffer a delay in being able to market their property.

Keith Hill: Before addressing the amendments, I shall respond to at least some of the points raised by Opposition Members. However, I do not propose to respond the point about the early availability of packs raised by the hon. Member for Ludlow, as we shall move on to that subject in the next group of amendments.
 The hon. Member for South-West Bedfordshire (Andrew Selous) asked about payment for packs and whether they were freely available. My understanding is that they were. However, we have ample survey evidence, both from research that the Government have carried out and from Yorkshire bank, which demonstrates that no less than 70 per cent. of respondents who had recently been involved in home purchase and sale indicated their support for the introduction of a home information pack with a payment. We are confident that given the work done by the Consumers Association and others, our proposed scheme will be regarded favourably, although it may come at a price.

Clive Betts: My recollection of the evidence given to the Select Committee is that Maria Coleman's scheme in Bristol was voluntary; therefore, although there were payments to surveyors, lawyers and others, those were deferred until the end of the process when the sale took place. In the small minority of cases in which there no transaction ultimately took place, those costs were
 passed on to the other schemes where sales did take place. There was eventually a cost in the Bristol scheme.

Keith Hill: I am, as ever, grateful to my hon. Friend. He is right about the Bristol case. We anticipate that when the packs come into operation, the costs involved will be deferred until the end of the process.
 Let me anticipate, but not encourage, further exchanges on the time scale of the viability and validity of the home information packs by saying that the saintly Maria Coleman from Bristol, to whom I will refer again in later debates, said that the home condition reports were renewed at a cost of only £10. We do not anticipate that the cost of the home information packs—specifically the home condition report—will be a major factor. As we always say, it evens out. Buyers will have to pay most of those costs in any circumstances, and what is a cost to a seller will be a benefit to the seller as buyer—most sellers are buyers as well. I do not want to get drawn into that matter now, because I was, as the Committee may recall, seeking to respond to some of the issues raised by Opposition Members before I came to the substance of the amendments. 
 If I may be permitted, I will respond to one or two of the issues raised by the hon. Member for South Holland and The Deepings, who, in his seductive fashion, sought to draw me into further concessions. He said that he felt that I had made a concession on phasing. Perhaps I ought to clarify that. We are entirely clear that the industry wants the packs to be introduced throughout England and Wales from day one. However, in our last exchanges on Thursday I referred to a trialling or lead-in period. Packs will be in place voluntarily for the six months leading up to statutory introduction, which, as I have said, we expect to be in January 2007. That is, of course, a form of trial, but there is to be no statutory trialling per se. 
 It has been freely admitted that the amendments have the same aim as Liberal Democrat amendments Nos. 344 and 346, which we debated at the end of the previous sitting. They would replace the proposals for a compulsory home information pack system backed by sanctions with a rather strange hybrid that I shall describe, albeit briefly, in a moment. We have no doubt that home information packs need to be compulsory to ensure that everyone benefits from them. Voluntary arrangements would not work. 
 I listened carefully to your words, Mr. Conway, and I do not propose to be sucked into a lengthy debate about voluntary versus compulsory arrangements. However, since the hon. Member for South Holland and The Deepings referred to the Law Society's TransAction scheme, let me say a word of clarification. The Committee may recall that, in a rodomontade at the end of our last sitting, I said that that scheme had been in place for years but had been a failure. Let me confess, here and now, that my remarks, made in the heat and dust of combat, were perhaps a little too forceful. 
 Allow me to clarify. TransAction involves the use of standardised forms and conditions of sale written in plain English. That is obviously a very good thing, and I am delighted that most conveyances now use it. I also accept that TransAction has helped to make the conveyancing system less baffling for consumers. Despite that, the plain fact is that TransAction has not eliminated the problems with delays and the transaction failures that the home information pack is designed to tackle. Our proposals will supplement and build on TransAction by adding to it other key information needed by buyers, including the home condition report and local searches. 
 It is telling that when the TransAction scheme was introduced, it was recommended that the seller should provide local searches. That recommendation was later withdrawn because it was realised that sellers would not pay for that on a voluntary basis. That supports our contention that a voluntary home information pack simply would not work.

John Hayes: That is a most revealing description of the Law Society scheme. The Minister is saying that people will not voluntarily pay for the pack, but that they will have to have it. He constantly tells us that people desperately want the pack, and that it is marvellous because there is a real pressure for it—but not so much pressure, it seems, that they will pay for it without compulsion. Is that what he is saying?
 The Minister has suggested that there will be no payment until the end of the process, but what if the process does not end? What if a property does not sell? Can we take it, from his remarks, that no money will change hands in those circumstances?

Keith Hill: After two full sittings spent on the matter, the hon. Gentleman seems taken aback by the fact that we intend to make the scheme compulsory. We intend to do so because all the evidence—as I have exhaustively demonstrated—shows that, if it were voluntary, this excellent proposal to the benefit of the consumer would not be implemented. Historically, significant parties with interests have been opposed to change. It is the nature of institutions and of human beings to be opposed to change, and I myself often have cause to say that there is nothing as conservative as a socialist—quite an admission! However, we probably ought not to go down that path.
 Of course the scheme is to be compulsory, but we are confident that the up-front certainty that it offers will be of immense benefit to the consumer. The hon. Gentleman talks about costs that will be incurred, but let me remind him that 30 per cent. of transactions fail already, and every time a transaction fails it is at a cost of £1,000. That is £350 million cost to the national economy each year. Where does he think that that money goes? It does not go into the pockets of the consumer. We can speculate about where it goes—

Andrew Selous: Will the Minister give way?

Keith Hill: No, if the hon. Gentleman will forgive me, I will continue and apply myself to the amendments. That is, after all, our duty as a Committee.
 The amendments would introduce a voluntary home information pack system, and would mean that the present flawed system continued. They would remove the duty to have a pack and replace it with a duty to say whether a pack was being provided. The duty to provide a copy of the pack on request would remain, but the duty would extend only to providing a copy of whatever it is that the seller has decided to provide, which in many cases might be nothing at all. 
 It would make little sense to impose a duty backed by sanctions where there is in essence no duty whatever. For example, what should the penalty be for saying that one has a pack when that is not so—or saying that one does not when one does? I realise that the amendments were designed to prompt a debate on general issues about compulsion, however, as you have already indicated, Mr. Conway, that is a debate that we have already had. In the circumstances, and in the light of my responses, I invite the hon. Member for South Holland and The Deepings to withdraw the amendment.

Andrew Selous: The Minister was not able to give way to me when he was talking about the reasons why transactions fail. He will be aware that the vast majority of transactions fail because buyers do not have their finances in order or their circumstances change—perhaps they change job. Only in a minority of cases is there a defective survey, which is perhaps the only part of the transaction process that seller's packs will help.

Matthew Green: One of the most illuminating aspects of this debate and last Thursday's is that the Minister, who is normally only too keen to take interventions and is friendly in doing so, has been remarkably reluctant to do so. On Thursday he did not take a single one, and today he has resisted several attempts by hon. Members to intervene. That is very revealing: the Minister knows that he is on weak ground.
 The Minister has completely failed to answer the question that the hon. Member for South Holland and The Deepings asked today and I asked on Thursday: if the packs are so wonderful, why does he have to force people to have them? If they are so popular—if the public are crying out for them—why does it take legislation and sanctions to make people have them? He has conspicuously failed to answer the essential point: why, if they are so wanted, are they to be compulsory? The reality is that if they were so popular, the market would be dictating the measure—people would be demanding packs from sellers now. The Government could easily enable that process and encourage it, rather than take the compulsory route. The longer the Minister speaks, the more unanswered questions about the process there are. Perhaps, that is why he is not taking interventions.

Keith Hill: Perhaps, I can respond—

Andrew Selous: He has been goaded into action.

Keith Hill: I was naively seeking to move our discussions along. We have allowed a whole extra sitting, but there are many amendments before us and I am sure that the Committee is eager to get on to exchanges on those issues.
 The hon. Member for South-West Bedfordshire challenges the significance of home condition as an aspect of transaction failure. I have to tell him that estimates vary as to the proportion of transactions that fail on the basis of a problem with the condition of the property. Of course, I acknowledge that there are many reasons for transaction failure. However, I have to say to him that the evidence that we have is that something between 40 and 70 per cent.—by any standards a significant number— of transactions fail because a problem is found in the condition of the property. 
 The hon. Gentleman said that people withdraw from transactions because they have financial problems. Discovering that there is a serious problem with the condition of the house or one that is thrown up by the searches that are done—both of which will be obviated by having the information up front—is itself a cause of financial difficulties in terms of the acquisition of the property. 
 To the hon. Member for Ludlow, who says, ''If packs are so great why haven't the people demanded them?'' I say: get real! How does a member of the public demand a home information pack or a home condition report? The demand is there—the Consumers Association and all of our researches suggest that the public want them. Somebody has to ensure that the great variety of institutions involved in the house buying and selling process respond by coming together and providing home information packs and home condition reports. That is what we are doing in the legislation: this new Labour Government are acting as the enabling state.

Matthew Green: I think that that was an intervention. [Laughter.] I am glad that the Minister has finally seen fit to try to respond to the point. However, he could achieve what he wants by enabling those bodies to work together rather than by forcing the packs on sellers, who are frequently also buyers. When we talk about consumers, it is as though the purchasers of houses are different from the people who are selling houses, but in the vast majority of cases, the people who are buying houses are also selling houses. The cost of the measure will be imposed on all those people. The Minister has yet to be convincing on this matter, but I am glad that we have finally got him to begin to address the key points.

Robert Syms: I am provoked to make a contribution. The Minister states that home information packs will increase the number of completions, but inevitably there will still be property transactions that fall through. Therefore, instead of his figure of £1,000 for that, the cost will be £1,000 plus the cost of the home information pack. There may be a saving for some people, but there may also be a cost for a large number of people who do not sell their homes. There may be bills of £1,500 or £1,700.
 What is the Government's latest estimate of what the pack will cost? Will there be any restriction on the charge, or does the Minister think that the market will end up providing a cost for the HIP? When one writes to an estate agent asking what percentage fee they will charge, will one also have to ask them how much they will charge for the HIP, or will that be part of the service? If a sale takes several months to complete and more copies of the pack have to be provided, will the additional costs be paid by the seller? In addition to the cost of the compilation of the original pack, there will be the extra cost of providing copies for potential buyers. 
 I want the Minister to provide more detail about the cost of the pack and the financial burden that will fall on the seller of the property because of the scheme. A number of my hon. Friends have pointed out that in the Bristol scheme the packs were not paid for. There has not been a scheme where people have had to pay. As my hon. Friend the Member for South Holland and The Deepings stated, if a property does not sell, the cost of trying to sell it has to be paid at some point. When does the Minister think it would be reasonable to pay for that—after one month, three months or six months? The Minister said that a voluntary scheme would not work, but we will have a voluntary scheme for six months, so he must think that that will not be successful. I want the Minister to fill in a few of the blanks that Committee members are interested in.

Keith Hill: We will come on to some of the issues that the hon. Gentleman raises in the natural course of events—if we ever reach our later debates. The £1,000 to which I have alluded is likely to include the cost of carrying out a medium or high-level survey on the property. The hon. Gentleman asks whether the cost will be £1,000 plus the cost of the home condition report. The answer to that is no, because the packs can be used to continue marketing the property. He asked in particular what we believe the cost of the home condition report will be. I am pleased to answer that question. I have it in my mind, but with the aid of this aide-memoire I shall be a little more precise.
 We have estimated the costs of buying, selling and moving home with the home information pack system at current prices, based on a three-bedroomed semi-detached house in a provincial town with a selling price of £125,000. That could be out of date, because the buoyancy of our economy has increased house prices so extensively in what we metropolitan types refer to as the provinces. We reckon that the costs to other parties—estate agent's fees, removal fees and legal fees—would be around £4,100. The home information costs would be as follows. We estimate that the local authority search would cost £160, the water and drainage search £40 including VAT, the home condition report £363 including VAT, and the office copy entries £10. The total cost of the home information pack would be £550. Therefore the total cost for the seller would be some £4,673. Of course, the truth is that many of those costs would occur inevitably in any normal circumstances. A proportion 
 of sellers, as well as buyers, already carry out surveys themselves at a certain cost. The home condition report is likely to cost about £350, which is a small part of the overall costs that are already incurred in any transaction. 
 I shall allow the hon. Member for Poole (Mr. Syms) to reply after I complete my response to the original set of questions. It is good to be orderly in such matters. I have responded to his question on the compilation costs. He also asked about the cost of copies. As an ongoing proposition that would be an additional cost, although I cannot imagine that it would be colossal. Increasingly, we expect these matters to be dealt with electronically, which should further reduce the cost of such transactions. I look forward to debating that with my hon. Friend the Member for Stafford (Mr. Kidney).

Robert Syms: Most costs in the housing market tend to be linked to the price of a property. For example, the estate agent's percentage fee tends to be based on the selling price, so it would be rather more for a £1 million property on the sea-front in Poole. Presumably, in terms of the home-seller pack, we are talking about a fixed cost that is not dependent on the price of a property, and the Minister would not expect someone to produce a more expensive pack for a more expensive property, or a cheaper pack for a cheaper property, because he is saying that the costs will be the same, irrespective of the value of the property.

Keith Hill: Yes, I think that that is right. The exercise carried out by the home condition inspector would be similar, irrespective of the size of the property. Therefore we expect that there will be a standard price. In the course of our exchanges, I hope to say more about how we expect various institutions to update and, indeed, market the home condition report. However, if the hon. Gentleman forgives me, I shall save that very good news until later.

John Hayes: I note a remarkable change in tone from the Minister this morning. He has changed from an agreeable and temperate figure to an intemperate and slightly prickly figure. He is unwilling to answer questions and even unhappy about taking interventions, which is out of character given the mood that has prevailed in the Committee thus far. He has changed from Max Bygraves to Mack the Knife. The reason is that the Minister is sensitive to the points that have been raised by a variety of Committee members about the effectiveness and wisdom of the compulsion that lies behind the Government's proposals.
 Four or five points that have emerged from the debate need amplifying. The Minister has failed to give a credible answer to any of them. What are the specifics of searches? He talks about survey information based on Bristol, but there was concern about those properties that require specific searches that do not lie within the purview of the packs as proposed. 
 In earlier sittings, we heard from the hon. Member for Bolton, South-East (Dr. Iddon) about the complexities that are associated with particular properties in certain areas. He spoke about properties that have a variety of land ownership, but equally 
 there could be issues about subsidence, or other local topological factors, that will not be covered by a standard search and will necessitate a further survey. The Minister will remember that coal mining searches, planning and flooding searches and Cornish tin mining searches were dealt with in the Government's consultation, and that mixed feelings were expressed in the survey data about whether such information should be excluded from or included in the standard searches. 
 In addition, the Minister has been unclear about payment. I am not happy with his suggestion that payment will be left until the end of the process, although he seems unsure about what will happen if the house does not sell. We should bear it in mind that the basis of his argument for the packs is that transactions fail—he claims between 40 per cent. and 70 per cent. of the time—largely due to unreliable or unhappy information provided by surveys, whether they are building society or private surveys. However, that is not borne out by the facts. 
 As the National Association of Estate Agents points out: 
 ''The Government's own research has revealed that only 13 per cent. of aborted transactions are caused by a bad survey.'' 
I hear hilarity from the Labour Benches on quoting that figure, as if estate agents cannot be trusted—[Laughter.] In fact, to give the hon. Member for Stafford chapter and verse, it was the Government's document, ''Key research on easier home buying and selling'', published in 1998, that first said that only 13 per cent. of aborted purchases were caused by a bad survey. That figure was merely repeated by the estate agents and made available to the Committee. It seems that some Committee members may not have spotted that that was a Government figure. We have therefore moved from Government research suggesting that 13 per cent. of purchases fail because of a bad survey, to a claim with an unconvincing lack of precision that something between 40 per cent. and 70 per cent. of purchases fail because of survey information. 
 The truth is that the Government's own research suggests that failed sales result from the following: in 11 per cent. of cases, a change of financial circumstances; in 8 per cent. of cases, the inability to get a mortgage; in 8 per cent. of cases, the inability to sell another house in the chain; and in 14 per cent. of cases, a buyer deciding that a new home was too large or too small. There is not a proposal from Ministers that there should be compulsion about the size of homes and the nature of people's choices, but we are told that there must be compulsion about these unwanted and unneeded packs. 
 The truth is that we not know who will pay in the event of a sale that does not complete through no fault of the seller despite the fact that they have had to buy one of these packs, nor do we know what the final price of the pack will be. We have received useful information from the Minister about an estimated cost of £550, but we have not received any assurances about a cap or exemptions for low demand areas. I am mindful of the Government's own research on that. 
 Again there was mixed opinion and some local authorities representing low demand areas expressed profound concern about the effect that these packs might have as their price possibly—or probably—escalates.

Matthew Green: One of the most illuminating things that the Minister said was that he expected the price of the pack to be about the same regardless of the value of the house and the income of the people involved. It is strange that a Labour Government are imposing a flat charge on people regardless of their financial circumstances.

John Hayes: Revealingly, in a desperate bid to appeal to the consensus that is beginning to emerge in the Committee, the Minister said that he had conservative tendencies. On the basis of that bold claim, he was trying to persuade Conservative Members to join him in supporting the packs.
 However, as the hon. Member for Ludlow said, the Minister did not say that the packs would affect some areas more significantly than others. He did not say that there would be flexibility in their introduction to take account of the views of local authorities and many people who believe that they will have a disproportionate impact in low demand areas. When he described the trial period, he did not say precisely where and how that trial would be conducted. There is phasing by another name: under my prodding and poking, the Minister finally admitted that there will be a degree of phasing in the trial. However, as my hon. Friend the Member for South-West Bedfordshire said, we do not know whether it will be a free-of-charge trial, like the Bristol experiment, or a full price trial. We also do not know whether it will apply in a particular part of the country, or whether any account will be taken of the value of properties—whether it will cover a range of types of property or whether it will be limited. We are uncertain about the trial and the phasing—and I suspect that the Minister is also uncertain about that, as he is about so much of what he said today. 
 We do not know when people will pay. There will be no cap on charges, no exclusions for particular areas of the country, and there are no specifics about which searches will be included and which will not in respect of properties about which additional information is needed. There are also no details about the basis on which this scheme is propounded. The idea behind it is flawed, because the argument that most transactions fail because of the survey is baseless according to the Government's own facts and figures. For all those reasons, it would be much better if the scheme were introduced on a voluntary basis. 
 I acknowledge that a voluntary scheme would require Government support and encouragement; all the ability and majesty of this Minister and this Administration would be required to bring together the partners who would be needed to make the scheme as effective as it could be. Ultimately, however, it would rely on the demand of ordinary people who believe that this kind of measure would be useful for them. The Government do not have confidence that 
 that demand exists. The Minister made that as plain as one could ever want when he said that the Law Society scheme failed because, when push came to shove, people did not want to pay. That was the most revealing of all of this morning's revelations about the Government's lack of faith in people's desire for these packs. Their desire is plentiful when they do not have to pay, as in Bristol; but as soon as they have to stump up, they seem to become less keen on the packs. That happens as soon as they start to realise that there is real commitment. In the Minister's eyes, the only way to make them understand that is to force them to have one. 
 That is not a tenable policy, and the argument has not been persuasive. The Minister knows that, which is why, like a cornered creature, he is striking out with uncharacteristic—and, although it really pains me to say it, slightly unappealing—intemperance. I know that the Minister will quickly return to being the kindly, wise and generous figure that we all know he is, but I suspect that he will not do so until we have made the amendment. So, in his personal interests, it is the duty of every member of the Committee to allow him to return to his natural character and step out of the unconvincing role that he has been playing. That role was forced upon him by the obligation to propose a policy that he knows to be deeply flawed. 
 I believe that it is absolutely necessary to press the matter to a Division. 
 Question put, That the amendment be made:—
The Committee divided: Ayes 6, Noes 10.

Question accordingly negatived.

Robert Syms: I beg to move amendment No. 405, in
clause 127, page 86, line 21, after 'control', insert
', seven working days after the property was first put on the market'.

Derek Conway: With this it will be convenient to discuss the following amendments:
 No. 406, in 
clause 127, page 86, line 22, at end insert 
 'within a permitted period of 14 days of the property being placed on the market'. 
No. 408, in 
clause 130, page 88, line 19, after 'behalf,', insert 
 'within a permitted period of 14 days of the property being placed on the market'. 
 No. 409, in 
clause 133, page 89, line 19, at end insert— 
 '(c) the core elements of the pack which must be made available before any marketing of a residential property may take place'.

Robert Syms: We have to some extent debated the principle of the pack, and the amendments are about our concerns on its operation. A number of issues have been raised by the Council of Mortgage Lenders and by estate agents about the fact that the pack needs to be produced on day one of the marketing of a property. Through our imperfectly phrased amendments, which refer both to seven days and to 14 days, we want to engender a debate on whether that is necessary, or whether the property could be marketed for at least a week or two while the pack is being compiled.
 It is fairly unusual for someone to walk into an estate agent's and make an offer on a property in a day; most people would ask for the estate agent's details and then arrange to visit the property. That could take perhaps a week. If they were serious about a property, they might look at it again. The seller's pack or home information pack could well be produced at that point, when the buyer could look at it in more detail while considering whether the property was for them, whether they could raise the finance, and all the pros and cons. 
 It would be sensible, and it would make the process flexible, if there were a little leeway about the period between the marketing of the property and the producing of the pack. If the pack were produced within seven or 14 days of marketing, it is still likely that someone who was serious about a property would have sight of the pack before they made a firm offer. I do not think that what we are proposing is inconsistent with the Government's aims and objectives; they want a pack to be produced. The amendments would allow a little flexibility in the operation, and would allow the property to get on the market a little quicker and be there a little longer. There have been a number of consultations on home information packs. Many people have made it clear to the Office of the Deputy Prime Minister that there should be a little leeway so that a property can be marketed earlier, avoiding the wait. 
 There has been constant reference to the shortage of surveyors. It is thought that we need several thousand more surveyors, depending on whether one takes the figures from the Royal Institution of Chartered Surveyors or from the Government. Some courses last 12 months; even if there were a six-month running-in period, there is doubt as to whether there would be sufficient surveyors to provide the home condition reports by the time that we start the scheme. We may find that estate agents and people marketing properties will be desperate for surveyors and that there will be a backlog. To allow a little bit of leeway into the process would make it work a lot better. If the Government are determined that properties should not go on the market without a home information pack from day one, they might find that there will be a backlog of properties without home information packs waiting to 
 go on the market for a week or two, or even longer, because of the shortage of surveyors and the problems of compiling packs that quickly.

Derek Conway: Before I call another Committee member, I should say that the debate on the first group of amendments was pretty wide ranging on the principle of the clause. Therefore I intend to ensure that the Committee sticks strictly to the terms of the amendments that it considers.

Matthew Green: In a sense, the amendments highlight one of the difficulties that the Government have got themselves into: many people, as the hon. Member for Poole has said, have asked for a degree of leeway, and that would appear to be common sense. However, allowing leeway, of seven days or 14, would slow some sales down. The Minister looked askance when I referred to my house purchase of 18 months ago. I was telephoned by the estate agent before the property had been advertised, because the person had approached them. I phoned my sister, who is an architect. I went to see the property that afternoon. My sister gave it the once-over and told me that it was not going to fall down. The property was more than 250 years old. A home condition report could have said that the building was old and had a few cracks—such buildings do have cracks, but they have stayed up for 250 years. I offered the asking price there and then, and the solicitors exchanged letters the next day. There was only any delay because of searches, and that was only for a couple of weeks.
 That sale would have been slowed down had the seller been allowed a couple of weeks to produce the pack. There would have been unnecessary cost, although we will not go over that again. The Minister will say that that is a really rare example of a quick sale, but the fact is that the packs will have a slowing effect. Such packs would either have to be produced before a property was put on the market, or—under the pragmatic Conservative amendments—some discretionary time would have to be allowed to produce them. Either way, some sales—I will not start quoting percentages; I just have my own personal experience—would be slowed down by the Government's approach.

David Kidney: The hon. Member for Poole used the word ''leeway''. I want to probe the Minister on the issue of leeway. I was not on the Standing Committee on the Homes Bill in the last Parliament, but a helpful briefing from the Library states that the Minister—on that occasion, my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford)—told that Committee that it would be possible to market a property with a pack explaining that the searches would be included as soon as they were available. That suggests that the pack would not be complete but that the property would nevertheless be marketed by the estate agent. That was quite an interesting concession. That was 18 January 2001 during the debate on clause 156. I just wonder what that means. A number of pieces of paper
 may be missing and yet the pack may still be called a pack and the property can be advertised for sale. Some guidance on that would be useful for estate agents, who are nervous about losing impulse buyers such as the hon. Member for Ludlow. Perhaps the Minister could help a little—now or at a later stage—by clarifying that point.

Sydney Chapman: You will have noted, Mr. Conway, that my name is not attached to any of the amendments in the group, which were tabled by my hon. Friends. That is an oversight on my part. Therefore, I rise to support my hon. Friends in those amendments. I do so for one principal reason: if this newfangled scheme comes into operation, flexibility is one of the most important aspects that we must seek to include.
 Earlier, in a comment on an amendment tabled by the hon. Member for Ludlow, I said that I resisted it because I felt that it was important that if someone had decided to put their home on the market, before doing so they should be allowed to draw up a home information pack. His amendment might have ruled that out. 
 I want to look at the other end of the telescope. There is a need for the amendment under discussion and I will give one specific example why. It might be that for financial reasons, someone has to put his home on the market hurriedly—he might have had to change job immediately and move from one part of the country to another. It is common sense that that person should be able to put his home on the market as soon as possible and have time to draw up the home information pack. If I disagreed with the amendments tabled by my hon. Friends in any aspect, it would be in order to introduce even greater flexibility and to say that before the seller agreed to a sale the home information pack should be produced, rather than just allowing seven or 14 days, as suggested in those amendments. 
 A range of conditions comes into play when a property is put on the market. I am fascinated by the statistics that have been quoted about how many transactions fall through. I think that many more fall through than the Minister suggested, in the sense that if it is a seller's market, sometimes that awful word ''gazumping'' can come into play. Gazumping can cause a transaction to fail. If it is a buyer's market, it is even more likely that there will be false cases, because the buyer will try to drive down the price—if one puts a property on the market for £150,000 in a buyer's market, an offer will probably be made for £130,000 or £140,000. That is the sort of technicolour spectrum that operates when properties are put on the market. I earnestly implore the Minister to ensure that if this scheme is enacted, flexibility is the watchword, and that he understands—I know that with his vast experience of these matters, he does—that he should leave the provisions as flexible as possible in order to cater for a very expansive market.

John Hayes: My hon. Friends have both made convincing arguments for those amendments, and I do not want to repeat what they have said. The hon.
 Member for Stafford made an interesting observation about earlier comments made by the right hon. Member for Greenwich and Woolwich about flexibility. I should have thought—but I will stand corrected if the Minister can give me chapter and verse as to why not—that the Bill makes that impossible. The Bill is very specific about the requirement for the packs when a house comes to market. We had a long debate about that issue in an earlier sitting—specifically about how one defined ''marketing'', and at what stage and in what circumstances it could be deemed to be taking place.
 Given that the Minister resisted amendments that were designed to provide the flexibility that the hon. Member for Stafford properly brought to our attention, I would be amazed if the Minister could persuade me that any such flexibility were consistent with the other provisions in the Bill.

Keith Hill: Fine. Let me go into extra nice mode, given that for whatever reason my style seems to be jarring with the Opposition this morning. I have been extraordinarily reasonable and self-restrained. Neither this morning nor at any stage in our proceedings have I attacked estate agents. I have heard mutterings. They are a tempting target. After all, all the surveys show that they are even less popular than we are, so if there were one group of people that it is tempting to put the boot into, it might be estate agents, but that is absolutely not my intention.
 Opposition Members have made their points in a reasonable fashion. It seems that the core of our exchanges has been whether there is flexibility for a delay in the provision of the home information pack. The answer is yes, there is flexibility. We shall debate that when we deal with clause 133(9), which allows time when a component needs to be in the home information pack on reasonable grounds. However, we have also had exchanges on the subject of quick sales. The hon. Member for Ludlow waxed lyrical in his usual fascinating, anecdotal fashion about life in Ludlow and his experiences there, but the penalty of anecdote is self-revelation. We have now discovered that the hon. Gentleman's sister is an architect. I was delighted to hear that, but it was interesting to discover that his experience of a quick sale seems to have been based on the availability of an architect to do a quick once-over. That is not a privilege of which others—some of us from less modest backgrounds—can avail ourselves, so it is potentially a weakness in his argument. Nevertheless, quick sales are an important issue and they are often mentioned in such debates. 
 Our starting point for debating amendments Nos. 405, 406 and 408 should be a clear acknowledgment of the deficiencies of the current system. The amendments would perpetuate those deficiencies by allowing marketing to start without a home information pack. That is diametrically opposed to the Bill's purpose. We have had a lot of to-ing and fro-ing on consumer attitudes. Our research shows that 40 per cent. of consumers are dissatisfied with the current system. Two more recent surveys conducted by the 
 Consumers Association and the Yorkshire bank show a dissatisfaction rate of 80 per cent. The Government are entirely clear that, on the basis of those levels of consumer dissatisfaction, action must be taken to improve the situation. 
 One of the principal causes for dissatisfaction is the lack of up-front information that is available to sellers and buyers. The lack of transparency at the start of the process is a primary cause of uncertainty, failed transactions and wasted costs. It is our intention under clauses 127, 128 and 133 to put that right.

Edward Davey: Will the Minister give way?

Keith Hill: I am delighted to see the hon. Gentleman in the Room. I know that he has many commitments. We forgive him for his late arrival and, to celebrate his appearance in Committee, of course I will give way.

Edward Davey: I am so grateful to the Minister for giving way in his usual courteous and generous manner. He is talking about people's dissatisfaction with the current system. Will he pledge to review this policy if after, let us say, two years with the new system he asks his officials to undertake a survey and they find similar or greater levels of dissatisfaction?

Keith Hill: Of course we monitor the effects of our policy; any sensible Government would do that. We will be looking at the market carefully. If we have clear evidence that this policy has failed we would expect in due course to rescind the legislation. Every Government must take that commitment on board. I take it on board in this case, because I have every confidence that this will prove to be a highly successful policy.

John Hayes: There are some points that require clarification. The Minister is now talking about 40 to 80 per cent. of people who are not satisfied with how the current system works. First, is that the same group that he claimed earlier withdrew from sales because of a bad survey? He provided no authoritative source for that claim. Secondly, given that he has acknowledged that there is going to be a lead-in, trial or phased approach—I defer to his terminology—can we assume that there will be some analysis of the effect of these packs during or after the trial, so that the full implementation can be adjusted accordingly? If, as the hon. Member for Kingston and Surbiton (Mr. Davey) suggests, there is no significant change in the level of satisfaction, or no change in the pattern of failure in terms of sales after the six-month period, the Government might want to rethink.

Keith Hill: Let me be extremely nice and say that I am afraid that the hon. Gentleman has got the wrong end of the stick with regard to my remarks about the lead-in period. I reiterate what I said. I have the words in front of me—I put it on the record. We know that packs will be in place voluntarily for the six months leading up to statutory introduction. That is a form of trial, but it is not statutory. As the hon. Gentleman well knows from reading the Bill, the Government are not bringing in a statutory trialling period. Where that
 form of trial is implemented voluntarily, there will be a useful period during which those responsible for operating the system will see how it works. The Government have no intention whatsoever of withdrawing their proposals on the basis of a voluntary experience in the six months leading up to the implementation of the system.
Mr. Hayes rose—

Keith Hill: If the hon. Gentleman will forgive me, although I have been generous throughout the Committee in taking a number of interventions, we all have to be a trifle restrained about interventions; otherwise, the thread of the broader argument, which was introduced at the behest of the Opposition in their amendments, will be lost.
 Let me return to amendments Nos. 405, 406 and 408, which assume that the time taken to compile a home investment pack would result in long delays in putting a property on the market. The evidence suggests otherwise. The Bristol pilot in 2000 demonstrated that, on average, the pack took less than 10 days to compile. With information technology, and other improvements in IT applications, the time scale is getting shorter. 
 It will probably benefit the Committee if I provide a couple of examples of the direct experience of the time taken to prepare the home information pack. Phil Irving, the managing director of TEAM Conveyancing, a company providing home information pack services to independent estate agencies, tells us that his business can already prepare and collate home information packs online with a service standard of just five working days. Ed Chamberlain of Chamberlains in Newton Abbot—an inveterate e-mailer of mine—runs a firm of estate agents and surveyors offering home information packs. He tells us that packs are prepared at the same time as the property particulars are prepared. The packs are then ready around the same time as the sales particulars are approved—that is around five working days. 
 I make no apology for once again referring to the saintly Maria Coleman of Bristol. She has written to the National Association of Estate Agents saying that it takes her business a minimum of three days and a maximum of five to compile a pack. She points out that during that time the sales details and photographs are prepared and submitted for the seller's approval. We are told that that is a standard practice prior to marketing, and is recommended by the NAEA. I should add that by 2007 the HIP compilation process will be faster still, thanks to the development of e-technology. 
 I ask the Committee, where is the evidence that HIPs will significantly delay marketing? In response to my hon. Friend the Member for Stafford and the call for flexibility from the hon. Member for Chipping Barnet (Sir Sydney Chapman), if, for some reason, items in the pack cannot be obtained within 14 days, we want to allow marketing to commence with an incomplete 
 pack. The missing item or items would be added as they became available. That issue arises later in clause 133, and I dare say that we shall look at that in more detail in due course.

Edward Davey: Will the right hon. Gentleman give way?

Keith Hill: I shall give way to the hon. Gentleman. Once he has arrived, there is no stopping him.

Edward Davey: I am mystified by what the Minister has said. I know that we will talk about this later, but perhaps he can share with us some initial thoughts. If the home information pack is incomplete but the property can still be marketed, can he explain how the trading standards officers will decide to enforce the law? What guidance will they have if two or three elements of the HIP are missing?

Keith Hill: The hon. Gentleman raises a perfectly reasonable question. There will of course be guidance as well as training. Broadly speaking, we expect trading standards officers to enforce the provisions with a light touch. We expect them to exercise common sense, and we do not expect them to leap in where there is a reasonable and non-systematic example of failure. Common sense and reasonableness are likely to be the hallmark of the performance of trading standards inspectors.

Chris Mole: Does the Minister agree that it would be good for trading standards departments around the country to go into partnership with estate agents in developing training, in the same way as those operating best practice did when the last round of legal changes affecting estate agents came into force? That experience proved that it was better that there was a common understanding between trading standards officers and estate agents about what they would be enforcing before the regulatory regime was fully implemented.

Keith Hill: I think, if I may say so, that my hon. Friend makes an extremely reasonable point, and I take it seriously. In these, as in all matters, I am a great proponent of partnership working, and I would certainly expect that kind of partnership to be implemented in the lead-in to the new regime.
 I am genuinely encouraged by the degree of coming together of all elements of the industry, including LACORS—Local Authorities Co-ordinators of Regulatory Services—which is already heavily involved in the process. My hon. Friend is absolutely right, and I give him an assurance that we intend to pursue that line. We have firmly registered his point. 
 Somewhat predictably, we have had an exchange on the issues of speed, single-day sales and speculative transactions. Let me respond to the assertion that the new system may deter speculative sellers, and that they would be put off by the up-front cost of the pack. There is no hard evidence for that. Indeed, the experience of other areas and countries that have introduced home information packs—the two closest comparisons are New South Wales in Australia, and Denmark—show 
 that when similar schemes were introduced there is a negligible effect on the supply of property to the market.

John Hayes: Will the Minister give way?

Keith Hill: I will not, because I need to develop that point first.
 I see nothing to suggest that the situation would be any different for HIPs in England and Wales. Research carried out nationally by the country's largest estate agency chain, the Countrywide Assured Group plc, found that only 13 per cent. of sellers would not put their property on the market if they had to pay up-front costs for a pack. Countrywide observed a noticeable similarity between those people and timewasters—people who were not serious about selling. It is also worth pointing out that the industry does not expect sellers to have to pay up front. More expect all or some of the cost to be deferred until completion—a point made by my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts). We believe that that would remove any impediment to bringing homes on to the market. 
 The hon. Member for South Holland and The Deepings wanted to intervene.

John Hayes: I did indeed. The Minister will remember that New South Wales has about 100,000 sales a year, compared with the 1.5 million a year in the United Kingdom. New South Wales is the only state or territory in Australia to have introduced the packs, and in America and Canada, for example, they have been specifically excluded from consideration.
 Closer to home, the Minister might want to comment on the Scottish Executive's view on the matter. I understand that they have concluded that a voluntary scheme of the type that we discussed under earlier amendments—I will not return to the subject for that reason—would be an altogether more appropriate way of moving forward. International research is at best questionable ground for the Minister to stand on.

Keith Hill: Would the hon. Gentleman enlighten the Committee as to why Canada and America have excluded the schemes, and what does ''excluded'' mean in this context?

John Hayes: Well, I am intervening on the Minister. I would be more than happy to brief him on the subject outside the Committee, but there are legal issues in America associated with the inability to introduce home information packs. Indeed, if the Minister wants me to give him chapter and verse on America and Canada, I have the information to hand. I will be more than happy to let him have it at the end of the sitting.

Keith Hill: I am very grateful for that enlightenment. We have all learned a good deal from that exchange. New South Wales is only a part of Australia, but it is a significant part. It may be of interest to the Committee that Australia, notwithstanding its huge terrain, is the most urbanised society in the world: 95 per cent. of its population live in urban areas. To that extent, the experiences of home sales are highly
 comparable—[Interruption.] The hon. Gentleman was not very good on Canada and America, and I will not easily give him the opportunity to wax on about another part of the world. The nature of the property market in our two countries is not very different. In the UK, most chains in home selling and buying are of a regional nature. Therefore, New South Wales provides a reasonable comparison. I do not suppose that the hon. Gentleman will want to dispute that although Denmark is a smaller country its essential demographic aspects are very similar to those of the UK.
 Given the nature of amendments Nos. 405, 406 and 408, it appears that the hon. Member for Ludlow does not see the benefit of bringing together all the relevant information at the start of the process before marketing commences. I impress on him that compiling the pack need not take long and it is time well spent. I do not doubt that under the current system properties can be put on the market quickly and that in some cases a buyer can be found the very next day—especially if your sister happens to be an architect. However, that apparent speed can be illusory, as it is often followed by protracted negotiations while the legal aspects are sorted out, local searches are commissioned and the property is surveyed. Each of those can reveal problems that add to the delay, or lead to the collapse of the sale. The whole process is further complicated by chains. 
 Having the relevant information at the start of the process creates a number of benefits. The seller and agent can use the home information pack to assist in setting the asking price. For the first time, agents will be able to reflect the true condition of the property in their advice on the selling price. The pack will help the seller and their professional advisers to identify problems—for example, with the title—which can then be addressed swiftly before they become a risk to a successful sale. 
 Other benefits include more transparency, as buyers can make offers knowing the true condition of what they are buying. I do not think that the Committee will mind me mentioning again that savings will be evident; the £350 million wasted each year in aborted transactions will be reduced. Finally, streamlined conveyancing will be possible because the bulk of legal preparatory work will be carried out in the days before marketing rather than in the weeks—and sometimes months—after the offer has been accepted. 
 The benefits in terms of shortening the period from offer acceptance to exchange of contracts and of making the process more transparent should more than outweigh any slight delay to marketing while the packs are being put together. If we were to allow marketing even for a limited period without a pack, that would be similar to the current system in which buyers and sellers negotiate and make decisions without the benefit of knowing all the facts. As I have frequently had cause to observe, that is at the root of consumers' dissatisfaction with the current system. 
 I do not accept that a person who sees the home of their dreams and wants to market their own house immediately in order to buy that home will be worse 
 off under our proposals. That person's chances of getting the property would depend on the price that he offers and his ability to proceed. If other people are after the same property and are more ready to proceed—for example, cash buyers and people who are well advanced with the sale of their own home—the chances are not good. Instant marketing without a pack will not improve matters. Even if the person receives an acceptable offer on day one, the seller and agent of the home that he wants to buy will not rely on that offer. Why should they? The buyer will not have all the information needed about the property to commit himself. There will be a nearly 30 per cent. chance that the offer will not proceed to completion. 
 The reality is that our would-be buyer, as now, will need to make a realistic judgment of his ability to buy the home. His chances will be better if he markets his own home with full information up front, thereby significantly reducing the chances of a deal falling through later when information about title, searches and conditions comes to light. 
 I turn finally to amendment No. 409. As the Committee will doubtless recall, it seeks to create an obligation for the core elements of the pack to be available when marketing first takes place. Similar powers are already contained under clause 133. As I explained in the notes of policy intent, which I have made available to the Committee, our aim with the pack's contents is to strike a reasonable balance between comprehensiveness and cost. We propose to include in the pack only those documents that are relevant to the property for sale, that are of interest to potential buyers and that will help them to make important decisions. The proposed contents set out in our consultation paper provide information that, if not disclosed up front, could later threaten or delay the transaction. Our intention therefore is that all documents prescribed for inclusion in the pack will be core documents. In the light of those eminently reasonable explanations, I urge the hon. Member for South Holland and The Deepings to withdraw his amendment.

John Hayes: It is important to nail down the issue of international comparisons. The Minister chided me about my reference to America. He will know that it is illegal in America for financial institutions to own estate agents. Indeed, it is illegal for estate agents to have a direct commercial relationship with surveyors. Neither of those points are true in this country. The reason why the American system effectively prohibits the process that is necessary to deliver the packs is therefore clear. There are 80,000 sales per year in Denmark and up to 90 per cent. of properties in that country were built in the 20th century, whereas this country has the oldest housing stock in the European Union.

Edward Davey: The hon. Gentleman made a very important point when he described the system in the United States of America. It gives a real warning to this country about our regulations. The vertical
 integration with the lenders, the estate agents and the surveyors is dangerous to consumer interests. Does he not think that major conflicts of interest will cause huge problems down the line?
Mr. Hayes rose—

Derek Conway: Order. Before the hon. Gentleman is tempted down that route, I am sure that he will be sticking to the group of amendments.

John Hayes: And that is one of the many reasons why the amendments are so pertinent. The delay that they would bring—the pause for thought—was admirably advocated by the hon. Member for Stafford, who made his argument crisply and with real passion. I should be surprised if he did not vote in favour of the amendment because that would be a piece of hypocrisy of which he would never be guilty. We know that we have at least one vote from the Labour Benches. [Interruption.] Far be it from me to be unkind to the hon. Gentleman.
 The Government's resistance to the amendments is based, as the Minister described, on international data, relying on one trip to Denmark and a desktop analysis. That is the truth of it. I do not believe that the Minister or his officials went to the United States and made extensive studies of the issues that the hon. Member for Kingston and Surbiton mentioned. I do not believe that the Minister has been—much as he might have liked to—to New South Wales and discussed those issues in great detail. 
 Therefore, we have Denmark cast before us in this Committee in an unconvincing effort to persuade us that the amendments are not wise. Yet Denmark, by comparison with the United Kingdom, is a tiny market, in which the nature and condition of housing are very unlike our own. New South Wales—a far-off place, the people of which we know little—is offered as the other prime example. Yet we also know that the Minister and his team have not been there to examine the implications of adopting its system in this country. Bluntly, the international comparisons—[interruption.] The Minister is, perhaps, learning that some of his officials have been there. We do not know whether they have or not. Frankly, Denmark and New South Wales are not impressive references for this kind of policy. 
 The hon. Member for Kingston and Surbiton is right about the United States. The amendment would at least provide some opportunity for those obliged to produce the packs to have the necessary time to do so in a way that is professional and conducive to the Government's intentions. Despite the Minister's bold claims that the packs will all be produced in double-quick time—he draws on the Bristol experience, which he speaks about rather as one might speak about Mother Theresa—the truth of the matter is that many in the industry doubt its ability to produce the packs on a universal basis with anything like the speed that he suggests. Such a delay will damage the market, as 
 sales of properties are held up, the market is stalled and fewer properties are available for potential purchasers. The whole picture is one of potential chaos. 
 The trial period—which we now hear is not a trial—will not help us to inform the process at all. As the Minister said, it will be a six-month run-in, but at the end of that period the Government will not make any adjustments or changes to the proposals because they will already be on the statute book. Therefore, the trial is not a trial of any reasonable kind that will help to inform the policy; it is simply a desperate bid by the Minister to try to introduce the policy with some degree of coherence. I suspect that it will be incoherent and unworkable, as many in the industry are telling us and I am sure are also telling him. 
 Before the Minister tries me about America and Canada, he ought to examine their experience more closely. I think that the hon. Member for Kingston and Surbiton made a point that the Minister should listen to very carefully. There are real dangers in the proposals, and it would be advisable for him to support our amendments so that the dangers can, to some degree, be averted.

Robert Syms: I think that we have made a little progress today. The Minister's comment that he would expect trading standards officers to use a light touch is welcome, as is the suggestion that if not every item in the pack were compiled from day one there would have to be some degree of flexibility. I suspect that the one item in the pack that will take some time to compile will be the home condition report. That requires someone to get in their car, drive to a property, get access to it, look at the roof and all the other bits and pieces, compile the report and send it in. Having spent a lifetime in the building industry before politics, I know that trying to get hold of people to do things when one wants to do them is not necessarily an easy thing. Therefore, the amendments that we tabled were framed, in the most helpful fashion, to leave a small degree of leeway. I do not see any great problem in having a week or two weeks to get to the point where a pack must be finalised.
 The Minister generously set out his example of the cost of a pack, which came to £573. Today he has been praying in aid all the saintly estate agents who have been telling him that they could provide a pack in three or five days, but nowhere in his figures or comments has there been any assessment of estate agents' administrative costs. Someone will have to chase several documents and sit in the office putting the packs together. It is unrealistic to assume that that will be a loss-leader for estate agents and that they will not charge anything for doing it. There will be a lot of people sitting in estate agents' offices producing that information. 
 There is bound to be some administrative cost. The Minister has not mentioned that. When he prays in aid various saintly people in Downend or Bristol, it might also be appropriate to make some assumption about what it would cost an estate agent.

Sydney Chapman: We are coming to an amendment relating to energy efficiency. Am I not right in saying that the home information pack will, under a EU directive, have to contain an energy efficiency report?

John Hayes: Yes.

Sydney Chapman: Does that obtain now? I think not. I do not think that there is a requirement to have an energy efficiency report before a house is sold. Additional obligations will be put on the person who provides the home information pack.

Robert Syms: My hon. Friend raises a good point. We are talking about implementation in 2007, which is the latest date that the Minister gave. Of course we have to comply with the European directive that we have signed up to.
 As the Minister has regained a rather more congenial faccade and has been not unreasonable in responding to our group of amendments, I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn.

Edward Davey: I beg to move amendment No. 345, in
clause 127, page 86, line 21, leave out 'home information pack,' insert 'energy efficiency report'.
 The amendment is a classic. It would remove the duty to have a home information pack and replace it with a duty for energy efficiency. The energy efficiency report would be needed to comply with the directive that the hon. Member for Chipping Barnet mentioned. This is also a probing amendment. Although we shall deal with this point in more detail in discussing clause 133 when we debate the contents of the home information pack, the amendment is relevant because it gives the Government the chance to get out of the mess that they have got themselves into and still comply with the directive. 
 There is probably cross-party agreement that the general policy on energy efficiency is the way to go. We have our Kyoto obligations on limiting CO2 emissions and in the House there is cross-party commitment to tackling fuel poverty. It is a good thing to try to ensure that the energy efficiency of homes is improved as they are bought and sold. There are a number of tools that we can use to do that, whether through building regulations or tax incentives. It is a good idea to ensure that the energy efficiency performance of homes is assessed on sale. 
 The EU directive 2002/91/EC on the energy performance of buildings is welcome, but its relationship to this part of the Bill, and to home information packs generally, is very interesting. Those people who have been engaged with the Government at ministerial and official levels over the past few months and years have defeated all the Government's arguments in this area one by one and explained the Government's shoddy thinking, but they have been left with the impression that the Government are going to go ahead with this measure simply to comply with the EU directive on energy efficiency. Their arguments on gazumping and speeding up the process have been 
 dealt with and all the arguments for introducing home information packs have been completely defeated, but it is impossible to defeat the argument that the directive must be transposed into national law—it does and there is no dispute about that. Therefore we shall try to help the Government. They can get rid of all the nonsense stuff that has no justification, and keep to the hidden purpose of part 5, namely complying with the EU directive. 
 There are two ways in which we could comply with the directive. We could follow the route of the amendment, so that the energy performance certificate would have to be obtained prior to marketing. That is the second-best way but it follows Government thinking, which is why, in the spirit of compromise, I am probing in that direction. The best way would be to put this duty on the seller prior to sale, as opposed to prior to marketing. Such an obligation prior to sale would comply with article 7 of the 2002 directive, meet the environmental tests and objectives that we are trying to pursue, and meet the Government's international obligations. I therefore tabled the amendment not because it is the perfect solution but because it is something that the Government could take on board as they try to meet their obligations without damaging the wider housing market.

Keith Hill: I understand the spirit in which the hon. Gentleman has moved his amendment, although I dispute his generalised assertion that as discussion with operators has gone on, they have succeeded in dispelling all the Government's arguments in favour of HIPs. His party appears to have reluctantly decided on the voluntary arrangement now that the HIP is on the table, but I did not hear his party calling for its voluntary introduction before the Government made their proposals. Can he explain how the industry has proposed to resolve the problem of the rather lengthy time it takes to buy and sell a house in the UK?
 As part and parcel of our international research, we looked at seven reasonably comparable countries, and we found that the average time from offer to completion was seven weeks, compared with an average of 12 weeks in England and Wales. Only France was slower, where it took between six and 16 weeks. The truth is that in England and Wales we have a slow process. On behalf of the consumer, it seems a not unreasonable intention to speed up that process. 
Matthew Green rose—

Keith Hill: I suppose since I have set this hare running, even though it was in response to a point raised by the hon. Gentleman, I had better give way.

Matthew Green: The only times that constituents have come to my surgery to complain about the speed of buying a house is when the problem has been with the slowness of certain firms of solicitors. There has never been a problem with other areas; it has been the practice of solicitors' firms of not getting on with the job, and there is nothing in the Bill that would speed that up.

Keith Hill: Well, there is. The searches, which solicitors engage in, will be available up front by means of the home information pack. That information will not be subject to delays in the process after offers have been made; it will be available to the buyer from the word go. Much as I love the hon. Gentleman's constituency—it is beautiful, and Ludlow is an exquisite town—he cannot always generalise from the Ludlow experience. Ludlow, ce n'est pas le monde, although of course we always enjoy his anecdotal references.
 Let us be entirely clear about the purposes of the amendment. It would replace the requirement to provide a home information pack with a duty to provide an energy report only. I am certain that the Committee will be aware of the effect of EU directive 2002/91/EC of 16 December 2002 on the energy performance of buildings, which came into force on 4 January 2002. I have the document in front of me; it makes a fascinating read. I am most grateful to the hon. Member for Kingston and Surbiton for encouraging me to go through it. Its purposes are excellent, and member states have three years to implement its provisions, although the period can be extended if, for example, there are not enough trained people to carry out inspections. 
 Article 7 of the directive requires that 
 ''Member States shall ensure that, when buildings are constructed, sold or rented out, an energy performance certificate is made available to the owner or by the owner to the prospective buyer or tenant, as the case might be.'' 
The article provides that 
 ''The energy performance certificate for buildings shall include reference values such as current legal standards and benchmarks in order to make it possible for consumers to compare and assess the energy performance of the building. The certificate shall be accompanied by recommendations for the cost-effective improvement of the energy performance.'' 
So far, so good. Where homes are marketed for sale with a home information pack, the directive will be implemented in relation to most residential property sales by including in the pack an energy report that complies with those requirements.

Edward Davey: Will the Minister give way?

Keith Hill: Just let me pursue my thought. It is our contention that there will be considerable cost benefits, too. The energy report will be considerably cheaper if it is provided as part of the home condition report. Potential buyers will have the added bonus of a valuable and useful report on the condition of the home that they are considering buying, as well as important information on its energy efficiency. We are all in favour of incorporating another excellent initiative by the European Community. I share the hon. Gentleman's passion for the measure, but the measure is not in itself sufficient to meet the assurances that consumers demand with regard to the home buying process.

Edward Davey: I have just a gentle question. The Minister has read out article 7.1. How do the Government intend to implement the energy performance certificate requirements with respect to the rented sector?

Keith Hill: That, of course, is not germane to our debate. I suspect that responsibility for the implementation of those measures does not even lie with my Department, although I am of course perfectly willing to answer on the issue. [Interruption.] Of course I read from the directive. The measures are in the directive. That does not mean that we are debating the application of the measures to the rented sector at this stage. Let me recall the hon. Gentleman to the purposes of our debate. We are discussing the implementation of the home information packs, of which the energy certificate will be an essential part. We welcome that, but my point is that it is not enough in its own right.

Edward Davey: I am trying to be helpful, because by the time I have finished a message will have reached the Minister. He says that the matter may not be his responsibility, but the Bill lays quite heavy regulation on the rental sector. Do the Government think that, in order to comply with that part article 7.1, additions to parts 1, 2, 3 or whatever are needed?

Keith Hill: I am not sure that we are necessarily making provisions along those lines, but we might be. However, the Committee will be delighted to learn that inspiration has now winged its way to me. The application of the directive to the rental sector is under consideration and options are being considered. That might be implemented through secondary legislation.
 The hon. Gentleman cannot distract us from the inadequacies of the amendment. There is no doubt that the provision of energy efficiency information in the home information pack will bring the benefit of raising public awareness of this subject, and that it has the potential to make a major contribution to improving the nation's housing stock. However, it cannot on its own solve the problems of the home buying and selling process. They will only be tackled if there is a full pack with all the information required for buyers to take informed decisions. An energy efficiency report is not a substitute for the home information pack. I do not believe that the hon. Gentleman really thinks that it would provide the range of information that a buyer reasonably requires to make a judgment about the condition of a property and, in the light of my explanations, I trust that he will withdraw the amendment.

Edward Davey: That was a more interesting debate than I had expected. I look forward to the Minister telling me later where to find the consultation paper on the application of the relevant part of paragraph 1 of article 7 of the 2002 directive. If the matter is under such active consideration, something must have been published for private landlords to be consulted about and for this House to contribute to.
 I turn to the meat of the amendment. The Minister tried to knock it aside by saying that it did not deal with the problems in the house purchasing market. I am afraid he misses the point. We believe that his solution to those problems is not the right one. As he knows, things are happening, particularly in the application of information technology and to home purchase—for local authority searches and in e-conveyancing, for example. Such a use of technology is the best way to speed up the process, as are schemes such as the Law Society's TransAction scheme. Those schemes are working. 
 When the Minister complains about the British system, he always forgets to use one adjective. The British system is cheap—the cheapest in the world. However, it will rocket up the table after the measure is introduced. Costs will escalate, and ours will no longer be the cheapest system in the world by the time that the Government have got their way.

Chris Ruane: Will the hon. Gentleman give way?

Edward Davey: I will do so in a moment. If the Government had at least waited to see whether the new applications of information technology dealt with the timing issues, they might have had the best of both worlds—a cheaper and a quicker system. Their approach will end up with us having one of the more expensive systems.

Chris Ruane: Is the hon. Gentleman equating the cheapest with the best?

Edward Davey: No. I was just trying to give a broader picture than the one that the Minister provided. The Minister always looks at the bad side and never at the good side. In the interest of balance, I wanted to make sure that the Committee had the full facts, and not just a very partial rendition of them.
 I do not wish to press the amendment to a Division now, because I think that we will return to the issue in greater depth and we may get more answers from Ministers then. I am grateful to the Minister for at least having a go at defending his position. It will be for others to judge whether he did so well. I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn.

David Kidney: I beg to move amendment No. 373, in
clause 127, page 86, line 29, at end insert—
 '(3) A person has a home information pack under his control for the purposes of subsection (1) of this section if he has the ability to access an electronic version of the information required to be assembled in a home information pack, whether on the internet or otherwise, which shall hereafter be referred to as an ''electronic home information pack''.
 (4) References in this Act to a ''document'' shall include reference to an electronic document unless the contrary is required by the Act and references in this Act to providing information shall include the making available of information in an electronic form unless the contrary is required.'.

Derek Conway: With this it will be convenient to discuss the following amendments: No. 374, in
clause 128, page 87, line 1, after 'document' add 
 'or makes such a document available electronically'. 
 No. 375, in 
clause 128, page 87, line 26, at the beginning insert 
 'Save where the seller makes available an electronic home information pack,'. 
No. 376, in 
clause 128, page 87, line 34, leave out subsection 9 and insert— 
 '(9) A person shall be entitled to comply with the duty under subsection (1) by providing access to an electronic home information pack unless he reasonably believes that the prospective buyer is unable to access information in that form.'.

David Kidney: It is evident that the Minister has been looking forward to the debate on these amendments all morning. They are about an electronic home information pack, about which the Minister is enthusiastic because the Government are very supportive of developments in new technology—in e-governance and e-commerce, for example. The Government are also trying to improve access to e-technology, such as broadband, across the country. My right hon. Friend has mentioned many times before this debate specific advances in elements of home buying and selling that will benefit from electronic advances, such as online local government searches and mortgage lenders dealing with applications online. Most recently, the Land Registration Act 2002 dealt with Land Registry transactions online. Naturally, my right hon. Friend is enthusiastic about such matters.
 We must ask whether a specific amendment is needed to make it clear that a home information pack can be entirely in electronic form. I suspect that my right hon. Friend will say that enough has been done under the Bill for that not to be needed, but I do not think that he has done quite enough. Under clause 128(9), a document may not be given to a buyer electronically without the buyer's consent. Clause 144 sets out the interpretations of part 5 and subsection (3) of the clause refers to a document that is not in electronic form, while subsection (4) refers to a 
''document held in electronic form is to be regarded for the purposes of this Part as being in a person's possession or under his control'' 
in the circumstances set out in the subsection. 
 There are references in the Bill to the facility to use documents electronically, but it is definitely not clear that there may be an electronic home information pack. My right hon. Friend the Minister appreciates why that would be a good thing: less paper would be used, the system would be easier to update as more information comes in, and it would be less of a burden and therefore cheaper. There would be no need to charge for copies of documents, and it would be easier for the buyer to share the information with the mortgage lender, the solicitor and the surveyor. When the Select Committee considered the draft Bill, it commented at paragraphs 156 and 159 about electronic advances, the form of which was about how good it would be if sellers and buyers could view the transaction's progress online. Paragraph 159 asked the Government to consider financial incentives to local authorities to improve their ability to give search results online.

Sydney Chapman: I confess that what I have to say is born from complete ignorance. I may not be of prehistoric age, but I am certainly of pre-electronic age. I do not understand how the system works. Is the hon. Gentleman saying that, providing the information electronically would mean that the seller need not physically give a home information pack to a prospective buyer? If so, is there no obligation on the many people who are not as skilled at using this internet—or whatever it is called—as the hon. Gentleman is, to be given a copy if one can be printed off from the electronic device? The majority of people do not understand how to use the internet. There may not be the case by 2007—God knows where I will be then—but I am making a serious point.

David Kidney: It certainly is a serious point. Amendment No. 376 touches on that precise issue. I shall explain how the system works. Before I was elected to Parliament, I was a solicitor. To make a search, I had to fill in a form, send it to the local authority, and wait as it passed around various departments; I received it back about two weeks later. I have been told that it is now possible to send a search electronically to an authority in Northamptonshire and to receive the result 12 minutes later. That is an incredible improvement in performance. The same information is provided through electronic means as would have been on the pieces of paper that were returned to me after two weeks.

Edward Davey: That is an interesting example. Will the hon. Gentleman confirm that that process was carried out without a home information pack?

David Kidney: I find odd the Liberal Democrat idea that everything but the process of buying and selling houses should improve. The faster everything comes in, the more important it is that such information is available to the buyer before the process starts. The ridiculous arguments that occur when someone discovers halfway through the transaction that something is wrong with the property and wants the price adjusted will become completely ''dinosauric''. The fact that everything can be assembled very quickly completes the argument for home information packs. We do not need to talk about seven and 14 days before a property needs to have a pack available.

Edward Davey: The hon. Gentleman is making a very different argument from that of Ministers. They argued that the aim of the legislation was to speed up the process, but he now tells us that the process has already been speeded up. Ministers cannot have it both ways.

David Kidney: I invite the hon. Gentleman to read the Second Reading debate. The Government's argument was not about speed, but about transparency and consumer protection. They said, as a side issue, that a transaction would be speedier if people got their case into order at the beginning of the transaction and did
 not let it dribble and drabble during the process. The hon. Gentleman can read that in the Hansard report of 12 January.
 Amendment No. 373 is a proposal to add to the end of clause 127 the clear statement that the person responsible for marketing the property would be compliant with the duty in subsection (1) to have a home information pack under their control if they can access and supply the required information electronically. Amendment No. 374 would make clear that a ''document'' would include something supplied electronically. Amendment No. 375 would make clear that there would be no need to charge for supplying copies electronically—the Bill currently allows for charges to be made for copies provided in paper form. 
 Finally, amendment No. 376 relates to the point raised by the hon. Member for Chipping Barnet about the digital divide. It would not be reasonable to say that providing the document electronically would comply with the duty if the person who is to get the document has no means of receiving the information electronically. I propose that there should be wording to say so. In fairness, the Bill already tackles the matter from a different direction in clause 128(9), which states that the seller cannot provide the information electronically unless he has the consent of the buyer. I suppose that a buyer without the means of receiving the information would not give consent, so the Minister can say that amendment No. 376 is not necessary. 
 I do hope that my right hon. Friend will confront head-on the point about clearly stating that a home information pack can be entirely in electronic form. That would benefit to the process.

Robert Syms: This is one of the most important debates that this Committee will have. Many estate agents and mortgage lenders are concerned that what may be done should be made entirely clear. Their concern is that, as technology moves on, home information packs could slow the process down because of the way in which information can be moved rapidly, as the hon. Gentleman pointed out.
 It is important that the Minister state what is necessary. Under clause 130, there is a duty for a home information pack to be provided or inspectable, which I take to mean that if somebody goes into an estate agency, they can sit down at the back of the office and have a look at the details of such a pack, even if there is no copy available to give out. If a document can be provided in electronic form, I should have thought that it could be printed off in such an office. That would be an excellent and efficient way of providing the material and would obviate the need for piles of documents at the back of offices. After all, one would not know how many hard copies to produce, so making electronic copies would seem to be a much better way of doing things. It is important that the Minister states the Government's thinking on the matter.

Keith Hill: Amendments Nos. 373 to 375 would make it clear that the contents of the home information pack may be provided in electronic form.
 I assure my hon. Friend and guru the Member for Stafford that the amendments may not be necessary. However, it is not our intention to stand in the way of progress. Although the current home buying and selling process still involves the exchange of lots of paper documents, things are changing rapidly. Perhaps, broadband has not hit Battersea, but things are definitely on the move elsewhere. For example, some local authority and other searches can be generated electronically and sent over the internet to conveyancers rather than in paper form through the post. That is increasingly becoming the standard way in which information is exchanged, and the housing market is no exception.
 Let me put on record that I fully expect that by the time electronic conveyancing becomes standard practice and initiatives such as the national land information service are fully in place, packs will be entirely electronic. The Government have no intention of standing in the way of that. On the contrary, the Bill as drafted makes allowance for it, and the amendments are not necessary.

Matthew Green: The Minister has just said a very interesting thing, which is that he expects the packs to be wholly electronic by a date that he has not given. Perhaps, he will say when he thinks that might be. Furthermore, can he give a commitment to my constituents—and to residents of large parts of Shropshire, Herefordshire and the Welsh borders—that they will all be able to access broadband by that date?

Keith Hill: I cannot believe that the hon. Gentleman seriously expects me to give such a commitment, so I shall move on—although, for the sake of his admirable constituents, I express my hope in that respect.
 Amendment No. 376 would change the responsible person's duty to provide a copy of the pack to a potential buyer on request. Under clause 128(9) as it stands now, the copy provided could be an electronic one if the potential buyer agrees to have it in that form. The amendment tabled by my hon. Friend the Member for Stafford would change that to allow an electronic copy to be provided without seeking the potential buyer's consent, unless it was believed that he could not access the document in that form. 
 The fact is that although many people have access to the internet, there are many who do not. In that context, it is evident that the hon. Member for Chipping Barnet is on the wrong side of the digital divide. There could be many cases—and I have to say that the hon. Gentleman may be one—in which the responsible person could not reasonably take a view on whether the potential buyer had the necessary equipment. Bearing in mind—and I say this to my hon. Friend the Member for Stafford as a former solicitor—that failure to deliver a copy on time could lead to a breach of the duty, which could have serious consequences. 
 The formula proposed in the Bill is therefore the simplest and the best: electronic copies can be provided, but only where the potential buyer is asked whether that is acceptable and has given his consent. 
 What could be more reasonable? We expect the pack to be available in fully electronic form, and we encourage that development. However, we think that for the sake of those whose access to the internet is not to be assumed, the minor qualifications in the clause are necessary. I hope that in the light of that explanation, my hon. Friend will agree to withdraw the amendment.

David Kidney: I am grateful to my right hon. Friend. He made some statements that make it clear that he and I are entirely on the same wavelength and have the
 same intentions. My only query is whether the Bill does what he claims. As long as he continues to keep that under consideration, as he said he would, I am content to beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 127 ordered to stand part of the Bill. 
It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order. 
 Adjourned till this day at half-past Two o'clock.